Tax Versus Penalty: What the Romney Campaign Should Have Said

Obamacare is a tax. President Barack Obama lied to the American people when he said it was not a tax, only to turn around and argue at the Supreme Court that it was. Now that Chief Justice John Roberts has agreed with the Obama administration, even if he is wrong, “Obamatax” is the law of the land unless it is repealed. 

It is no wonder that the mainstream media, in this case NBC’s Chuck Todd (see video below), is trying to call Romneycare a tax, too, and to take the issue away from Mitt Romney. Romney campaign spokesman Eric Fehrnstrom tripped up on that point earlier today. But there is a very simple way to distinguish the two.

Romneycare’s individual mandate was enacted as a tax–even though Fehrnstrom tried to argue today that it is a “penalty.” In contrast, Obamacare’s individual mandate was enacted as a penalty–and became a tax because of the overreach of the Supreme Court (after bullying from President Obama, the Democrats, and the media.) 

Romneycare was honest with the legislators and voters of Massachusetts about what it was from the beginning. But Obamacare was a fraud–and the Chief Justice’s re-written version of Obamacare is no less fraudulent.

Let’s look at the statutes themselves. The text of Romneycare describes the individual mandate, in Section 2(b), as a “tax” to be collected by the state, unless the taxpayer shows proof of insurance, at which point he or she may claim a personal tax exemption. It is that simple. There could be no doubt, then or now, that the individual mandate in Romneycare was intended to be a tax–despite what Fehrnstrom tried to say, under pressure, today.

The text of Obamacare, in contrast, merely describes the individual mandate, in Section 1501, as a “penalty.” In addition, the language of the statute makes clear that Congress was basing its authority to apply the penalty on its Commerce Clause power to regulate interstate economic activity, not on the Taxing and Spending Clause. 

So the individual mandate in Romneycare was written as a tax, while the individual mandate in Obamacare was written as a penalty. When Obamacare was challenged, the Obama administration flip-flopped. But more than the labels, what is particularly odious about the outcome in the Obamacare case is that the Chief Justice and the Court’s liberals effectively re-wrote Obamacare as a tax to save it from being struck down as unconstitutional.

Now that Obamacare is a tax–as a matter of law–Mitt Romney ought to take advantage of that irony, especially since Obama made the tax argument himself through his Solicitor General. Obama lied to the American people about Obamacare, and broke his 2008 campaign pledge not to raise taxes on the middle class. Simple.

But the Romney camp is backing away from what ought to be a slam dunk, because it does not want to admit Romneycare was a tax. It was–and that is the point. Mitt Romney never tried to exceed the limits of the state government’s police power by imposing a punitive fine on every individual for failing to purchase a service from a private company. Nor did he lie to the people of Massachusetts about the fact that he was adding to their potential tax burden in order to pay for near-universal health insurance coverage. He played it straight.

That’s what Fehrnstrom and the Romney campaign should say. The actual difference between Obamacare and Romneycare is that Obamacare is a fraud–a costly fraud that cannot be implemented as advertised. It is a tax, according to President Obama and the Supreme Court, but it is also one of the biggest lies in American history.